A combination of advances in automation, COVID19, and globalization threaten to radically shrink employment opportunities in Canada. Meanwhile, the rich are getting richer. What are we going to do about disappearing jobs?
In a recent article for Social Europe, American academic Branco Milanovic suggests that working from home during the pandemic could radically change the demographics of work. He postulates that “as performance of a job becomes divorced from physical presence at the work-post, it will open many jobs to anyone with a Wi-Fi connection around the world.”
In other words, just as 20th century globalization very quickly offshored working class manufacturing jobs, our pandemic world could kick start the large-scale outsourcing of previously “safe” middle class jobs. Why pay Canadian wages when you can get the work done for a fraction of the cost elsewhere?
The Hollowing out of the Middle Class
Whether or not that will happen is still conjecture. What we do know, however, is that the next wave of AI advances won’t just focus on replacing traditional working class jobs. Expect many jobs that require a post-secondary education to disappear.
Here’s a list of the kinds of jobs that are already in the process of being automated:
- Customer service agents
- Market analysts
- Sales managers
- Auditors and book-keepers
- Middle managers
- Insurance underwriters
At present, low paying non-routine jobs are largely service occupations involved in the assisting or caring for others. The sad irony is that they are often the workers we need the most during times of crisis.
High paying non-routine cognitive occupations include upper managerial consultants, professionals, and technical experts. Middle management, on the other hand, is steadily being replaced by algorithms. As Yale professor Daniel Markovits, author of The Meritocracy Trap, points out in The Atlantic, top managers no longer work their way up through the ranks. They are increasingly parachuted in from the top with a mindset to cut bureaucratic waste - a euphemism for jobs.
In other words, our middle class is being hollowed out, with a very small group moving up, and an ever larger group moving down the income ladder. Millennials, already the principal victims of the corporate world's enthusiasm for precarious work, will probably be the hardest hit.
The Exponential Growth of Automation in the Work Place
According to a 2020 survey by the World Economic Forum, one half of the time spent on tasks at work in large companies will be done by machines by 2025. To put that in perspective, in 2016 only 29% of those tasks were automated. The WEF prediction doesn’t stand alone. Multiple studies done prior to the pandemic -- by the McKinsey Global Institute, Oxford University and the U.S. Bureau of Labor Statistics, among others — assert that there is massive and unavoidable change afoot.
The pandemic, not surprisingly, is accelerating that change.
Big Business’s “Solution” to Growing Job Losses
The business world presents retraining as the only option to address the looming unemployment crisis. There are three problems with that approach.
First, retraining programs have a very poor outcomes record. A 2019 report from the US White House Council of Economic Advisors found that “government job training programs appear to be largely ineffective and fail to produce sufficient benefits for workers to justify the costs”. The same is probably true for Canada.
Second, given the speed and scope of advances in automation how do you know what jobs to retrain for?
Third, companies deploying automation and AI say the technology allows them to create new jobs. But, according to a report from Time Magazine, “the number of new jobs is often minuscule compared with the number of jobs lost.” There are going to be too many people looking for too few jobs.
The sobering reality is that Big Business doesn’t care about job losses. I like to think that small local businesses do. But, like workers, they too have been pummeled by COVID19. More than 200,000 Canadian small businesses could shut their doors permanently due to the pandemic according to a recent survey by the Canadian Federation of Independent Business.
Meanwhile, Wall Street “minted 56 new billionaires since the pandemic began” with the largest gains in wealth amongst the Big Tech companies and their owners. Here in Canada “the country’s top 20 billionaires have amassed an average of nearly $2 billion each in wealth during six of the most economically catastrophic months in Canadian history.”
A Radically Different way Forward
The solution to the looming job crisis is not to retrain people for jobs that will probably continue to be replaced by advances in automation.
The solution is to create and value non-routine jobs that cannot be displaced by automation. Big Business is not going to be interested in this. It won’t be profitable enough. The creation of non-routine jobs will have to be a government financed initiative.
It's an initiative for which there is an historical precedent. It wasn’t the private sector that lifted Canada out of the 1930s depression. It was government spending - spending that built our province’s infrastructure and created jobs across the country over a 38 year (1938-1974) period. All of this was managed without the federal government incurring large debts thanks to an innovative, but deliberately forgotten, use of quantitative easing.
But let’s be clear. Government funding does not mean handing out government money to big corporations in the manner of the provincial government’s gift of over $300 million to oil companies, supposedly to protect NL oil workers’ jobs – jobs that are actually going to be impacted heavily by automation in the future.
The money would go to jobs that build community and strengthen the environment. There’s a growing movement advocating for the development of this kind of “People’s Economy”, where jobs could be devised, created and run, not just by governments, but by community and environmental groups. If you are curious about how it could be administered, check out this short video. Or take a look at how the this Toronto neighbourhood is working towards that goal.
There is no historical precedent for what is happening to jobs. Throughout human history workers have always been needed to fuel the economy, even if they did that as slaves. That’s about to change.
We can either acquiesce to that change, maybe even get some sort of basic income supplement to fend off the hard times as jobs collapse. That’s certainly what the corporate world would prefer. Or, we can redefine work and in doing so begin to create a different economy.
Acquiescence will, in my opinion, lead to powerless poverty, massive long-term unemployment, weakened democracy, and an economy dominated and controlled by monopolies and the oligarchs behind them. It will be a mistake to assume that this will be benevolent leadership.
On the other hand, it’s doubtful that our political leaders will have the will to challenge the corporate economy in even the smallest of ways. The neoliberal ethos that government should stay out of the market has permeated parliamentary and civil service culture for the last 30 years.
Change will only happen if we, the public, loudly demand it. That will require political activism, something that we Canadians are not very good at.
But there is a lot at stake. And the timing is right.